Legislature(2013 - 2014)BELTZ 105 (TSBldg)

02/18/2014 01:30 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 159 AIR AMBULANCE SERVICES TELECONFERENCED
Heard & Held
*+ SB 99 AIDEA: DEVELOPMENT LOANS TELECONFERENCED
Heard & Held
*+ SB 140 AIDEA: ARCTIC DEVELOPMENT PROGRAM/FUND TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SB 159-AIR AMBULANCE SERVICES                                                                              
                                                                                                                                
1:33:36 PM                                                                                                                    
CO-CHAIR DUNLEAVY announced  the consideration of SB 159."An Act                                                               
relating  to  air  ambulance  service  providers,  air  ambulance                                                               
membership agreements,  and regulation  of air  ambulance service                                                               
providers  and   air  ambulance  membership  agreements   by  the                                                               
division of insurance; and providing for an effective date."                                                                    
                                                                                                                                
1:33:55 PM                                                                                                                    
CHRISTIE  JAMIESON, Staff,  Senator Bert  Stedman, sponsor  of SB                                                               
159, introduced the  bill on behalf of the sponsor.  She read the                                                               
following   sponsor   statement   into  the   record:   [Original                                                               
punctuation provided.]                                                                                                          
                                                                                                                                
     Since  January  2009,  Airlift Northwest,  the  Seattle                                                                    
     based  provider  of  lifesaving air  medical  transport                                                                    
     services,  has offered  the popular  AirCare membership                                                                    
     program to  residents of  Southeast Alaska.  Over 1,600                                                                    
     Southeast households  are enrolled in the  program. Air                                                                    
     medical transportation  is expensive and  insurance may                                                                    
     not cover  all the  costs. The  purpose of  the AirCare                                                                    
     program is to cover  all out-of-pocket expenses such as                                                                    
     deductibles  and coinsurance  amounts that  may not  be                                                                    
     covered  by the  primary payer.  As an  AirCare member,                                                                    
     only your  insurance company  receives a  bill. Airlift                                                                    
     Northwest  is   secondary  to  all  payers   and  works                                                                    
     directly  with   your  insurance  company   for  claims                                                                    
     processing.  The AirCare  program  directly helps  fund                                                                    
     Airlift Northwest so they  can transport critically ill                                                                    
     or injured  patients to hospitals  with levels  of care                                                                    
     not locally available.                                                                                                     
     Since its  inception, the  AirCare program  was offered                                                                    
     to Alaskans  under a  regulatory exemption  it received                                                                    
     from the  Alaska Division of Insurance.  However, after                                                                    
     an  organizational   restructuring,  the   Division  of                                                                    
     Insurance  deemed the  program  no  longer exempt  from                                                                    
     insurance regulation  as stated  in AS  21.87.010 under                                                                    
     which Airlift  Northwest was providing the  program. As                                                                    
     a  result, the  Division of  Insurance ordered  Airlift                                                                    
     Northwest  to  cease  enrolling  new  members.  Airlift                                                                    
     Northwest   is   allowed   to  honor   their   existing                                                                    
     memberships  but  is  not   allowed  to  renew  expired                                                                    
     memberships.                                                                                                               
     If  Airlift Northwest  wants to  continue offering  the                                                                    
     AirCare program, then the program  must either be fully                                                                    
     insured  by a  health insurer  authorized by  Alaska or                                                                    
     Airlift   Northwest  must   obtain  a   certificate  of                                                                    
     authority  pursuant  to  AS 21.09  to  transact  health                                                                    
     insurance in  Alaska. Since Airlift  Northwest operates                                                                    
     under  the  umbrella   of  University  of  Washington's                                                                    
     medical system,  becoming a licensed insurer  in Alaska                                                                    
     is not an option for them.                                                                                                 
     Senate  Bill 159  will  exempt  air ambulance  services                                                                    
     from  the  state's  insurance  code,  thereby  allowing                                                                    
     Airlift  Northwest  to  continue offering  the  AirCare                                                                    
     program to Alaskans.                                                                                                       
                                                                                                                                
1:37:33 PM                                                                                                                    
SENATOR  OLSON  asked  the  reason  for  the  restructuring  that                                                               
eliminated the regulatory exemption.                                                                                            
                                                                                                                                
SENATOR STEDMAN  suggested the Division  of Insurance  answer the                                                               
question.                                                                                                                       
                                                                                                                                
SENATOR  OLSON asked  what other  medevac services  in the  state                                                               
would be affected by this legislation.                                                                                          
                                                                                                                                
MS.  JAMIESON offered  her understanding  that  Apollo [MT]  from                                                               
Fairbanks  would also  be  affected and  they  haven't voiced  an                                                               
opinion on the legislation.                                                                                                     
                                                                                                                                
SENATOR OLSON asked  if Apollo MT is owned by  an Alaskan company                                                               
or an outside entity.                                                                                                           
                                                                                                                                
MS. JAMIESON said she didn't know.                                                                                              
                                                                                                                                
SENATOR  OLSON  asked  if  Airlift  Northwest  and  Guardian  are                                                               
ineligible  to  receive  a certificate  of  insurance  in  Alaska                                                               
because they're owned by outside entities.                                                                                      
                                                                                                                                
MS. JAMIESON said she didn't know.                                                                                              
                                                                                                                                
l1:39:19 PM                                                                                                                   
SENATOR ELLIS joined the committee.                                                                                             
                                                                                                                                
SENATOR OLSON                                                                                                                   
                                                                                                                                
MARTY HESTER, Acting Director,  Division of Insurance, introduced                                                               
himself.                                                                                                                        
                                                                                                                                
SENATOR  OLSON  asked why  the  division  undertook a  regulatory                                                               
change that eliminated the exemption.                                                                                           
                                                                                                                                
MARTY HESTER clarified  that it wasn't the  division that changed                                                               
regulations. The division was approached  by another company that                                                               
wanted to  offer similar membership agreements  and operate under                                                               
the  same exemption  as Airlift  Northwest.  The division  deemed                                                               
that the new  company did not meet the Title  21 exemption. After                                                               
inquiry,  the  division   subsequently  determined  that  Airlift                                                               
Northwest no longer qualified for  the exemption that was offered                                                               
in 2008,  because in  2010 the company  restructured to  become a                                                               
nonprofit under the University of Washington.                                                                                   
                                                                                                                                
Airlift Northwest  is considered a municipality  under Washington                                                               
statute  and they  petitioned  the Division  of  Insurance to  be                                                               
considered  a municipality  under Alaska  statute or  a nonprofit                                                               
medical   service   corporation   under   AS   21.87.010.   After                                                               
discussions  with Department  of  Law, the  division deemed  that                                                               
Airlift  Northwest  neither  qualified as  a  municipality  under                                                               
Alaska  statute nor  as a  nonprofit medical  service corporation                                                               
because they weren't offering a  medical service. The company was                                                               
in   fact  offering   a  benefit   by  waiving   deductibles  and                                                               
coinsurance of  members that purchased the  agreements. Thus, the                                                               
Division of  Insurance contacted Airlift Northwest  and asked the                                                               
company to cease and desist.                                                                                                    
                                                                                                                                
SENATOR  OLSON  commented that  it  sounds  as  though it  was  a                                                               
reinterpretation of AS 21.87.010.                                                                                               
                                                                                                                                
MR. HESTER clarified that Airlift  Northwest changed structure in                                                               
2010 to  become a nonprofit  under the University  of Washington.                                                               
Responding  to  further  questions,   he  restated  the  forgoing                                                               
explanation.                                                                                                                    
                                                                                                                                
SENATOR OLSON asked if Airlift  Northwest aircraft are designated                                                               
as  public  use  aircraft  since  they're  a  municipality  under                                                               
Washington statute.                                                                                                             
                                                                                                                                
MR. HESTER said he wasn't sure.                                                                                                 
                                                                                                                                
1:45:01 PM                                                                                                                    
SENATOR  OLSON offered  his view  that anybody  who flies  a sick                                                               
person to get medical care is  offering a service. He opined that                                                               
the division  did the  people of Alaska  a disservice  by issuing                                                               
the cease  and desist order. He  asked if it's true  that medevac                                                               
services are no longer available.                                                                                               
                                                                                                                                
MR. HESTER  clarified that the division's  determination was that                                                               
an  air ambulance  service provider  can't  offer the  membership                                                               
agreement.  They can  still  operate, but  they  can't offer  the                                                               
benefit to not balance bill the additional cost.                                                                                
                                                                                                                                
SENATOR OLSON reiterated that this  is working against the public                                                               
interest and putting some people in dire straits.                                                                               
                                                                                                                                
MR. HESTER  responded that part  of the mission statement  of the                                                               
Division of Insurance is to  protect the consumer. In conjunction                                                               
with Department of Law, the  division determined that the product                                                               
that  was being  offered by  Airlift Northwest  did not  meet the                                                               
required exemptions under AS 21.87.010.  He also pointed out that                                                               
a product was still available  to Alaskans when this decision was                                                               
made. The  division determined that  it was  protecting consumers                                                               
by applying the statute as it was written.                                                                                      
                                                                                                                                
SENATOR  OLSON  maintained that  from  a  medical standpoint  the                                                               
decision is working to the detriment of the patient.                                                                            
                                                                                                                                
1:48:28 PM                                                                                                                    
SENATOR STEDMAN  voiced concern that  the lack of  competition is                                                               
driving the price  structure of air ambulance  services. He asked                                                               
the  division's  opinion  about altering  the  statute  to  allow                                                               
further competition.                                                                                                            
                                                                                                                                
MR. HESTER  responded that  the division sees  that SB  159 would                                                               
provide consumer  protections and  allow additional  business for                                                               
products  that Alaskans  have  asked  for to  be  written in  the                                                               
state.                                                                                                                          
                                                                                                                                
SENATOR STEDMAN said he takes that  as a statement of support for                                                               
the bill.                                                                                                                       
                                                                                                                                
1:50:06 PM                                                                                                                    
MR. HESTER restated the division's  mission statement to regulate                                                               
the  insurance   industry  to   protect  Alaskan   consumers.  He                                                               
continued to say  that consumers need products in  Alaska and the                                                               
state needs to be open for  business to provide those products to                                                               
Alaskans.  SB 159  provides the  protections that  consumers need                                                               
and allows the products consumers are asking for, he said.                                                                      
                                                                                                                                
SENATOR STEDMAN disclosed  that he is a licensed  life and health                                                               
insurance agent.                                                                                                                
                                                                                                                                
1:51:14 PM                                                                                                                    
CO-CHAIR  DUNLEAVY asked  what happens  to a  member who  needs a                                                               
plane and one isn't available.                                                                                                  
                                                                                                                                
MR. HESTER said  the products that were sold in  the past did not                                                               
guarantee service  and any  sold in  the future  wouldn't either.                                                               
Companies may decide  to offer reciprocity but  he couldn't speak                                                               
to the specifics because he hadn't seen those products.                                                                         
                                                                                                                                
CHAIR DUNLEAVY observed that something  could be written into the                                                               
agreement.                                                                                                                      
                                                                                                                                
MR. HESTER agreed.                                                                                                              
                                                                                                                                
SENATOR MICCICHE referenced  Section 2 subsection (c)  on page 2,                                                               
lines 6-9,  and summarized that  a third party isn't  required to                                                               
provide air  ambulance service.  He asked  if state  law requires                                                               
somebody  who is  available  to respond  to a  person  who is  in                                                               
medical need.                                                                                                                   
                                                                                                                                
MR. HESTER offered to follow up with the answer.                                                                                
                                                                                                                                
SENATOR  MICCICHE  asked  if other  companies  currently  operate                                                               
under the existing exemption.                                                                                                   
                                                                                                                                
MR. HESTER answered no, but  one underwritten company is offering                                                               
the product and it is compliance with Title 21.                                                                                 
                                                                                                                                
1:54:08 PM                                                                                                                    
SHELLY  DEERING,  Regional  Manager, Airlift  Northwest,  Juneau,                                                               
Alaska, introduced herself.                                                                                                     
                                                                                                                                
CHRIS MARTIN,  Executive Director, Airlift  Northwest, University                                                               
of Washington, Seattle, Washington, introduced herself.                                                                         
                                                                                                                                
MS. DEERING  said she is testifying  in support of SB  159, which                                                               
seeks  to provide  Alaskans with  the ability  to participate  in                                                               
membership programs for air medical  transportation. She has been                                                               
the  regional manager  of Airlift  Northwest  ("Airlift") for  21                                                               
years,  and  the  company has  been  transporting  patients  from                                                               
Southeast and other  regions of Alaska for 32 years.  She and the                                                               
staff of 19 nurses and pilots  live in Juneau. She explained that                                                               
Airlift  sold  air care  membership  in  Alaska from  2008  until                                                               
November 2013  when the Division  of Insurance asked  the company                                                               
to  stop  due  to  a  restructure of  Airlift  Northwest  and  an                                                               
interpretation of  the regulations.  Airlift currently  has 4,066                                                               
members in the program that reside in Southeast.                                                                                
                                                                                                                                
She  said  the  Division  of Insurance  has  been  supportive  of                                                               
getting legislation  that would allow  Airlift and any  other air                                                               
ambulance company  to sell memberships  to Alaskans. SB  159 does                                                               
this  and  also gives  important  oversight  to the  Division  of                                                               
Insurance.                                                                                                                      
                                                                                                                                
SENATOR MICCICHE observed that Section  1 appears to clarify that                                                               
an air  ambulance service  provider would have  to respond  if it                                                               
was available  when there was  a medical emergency, even  if that                                                               
company didn't have  an agreement. He asked  if his understanding                                                               
was correct.                                                                                                                    
                                                                                                                                
MS.  DEERING  stated  that  Airlift  Northwest  responds  to  any                                                               
emergent  request it  receives. The  question of  insurance isn't                                                               
raised.                                                                                                                         
                                                                                                                                
SENATOR  MICCICHE asked  if she  agrees that  Section 1  requires                                                               
that.                                                                                                                           
                                                                                                                                
MS.  MARTIN agreed  and also  confirmed  Ms. Deering's  statement                                                               
that Airlift responds  to any request for  emergent transport. It                                                               
doesn't matter  whether the person  has an AirCare  membership or                                                               
insurance. She noted  that last year Airlift did  over $7 million                                                               
in charity care.                                                                                                                
                                                                                                                                
SENATOR MICCICHE read Section 1.                                                                                                
                                                                                                                                
1:59:23 PM                                                                                                                    
SENATOR STEDMAN disclosed that he may be an AirCare member.                                                                     
                                                                                                                                
SENATOR  OLSON asked  how Airlift  Northwest is  able to  stay in                                                               
business in light of the ruling in Alaska.                                                                                      
                                                                                                                                
MS. MARTIN  said the company  has four bases in  Washington state                                                               
in  addition to  the  base  in Southeast  Alaska,  but the  issue                                                               
really isn't financial. It's the right thing to do for patients.                                                                
                                                                                                                                
2:01:49 PM                                                                                                                    
CHAIR  DUNLEAVY  opened  public  testimony.  He  found  none.  He                                                               
commented  that  without  air ambulance  service,  his  wife  and                                                               
youngest child  wouldn't have survived. He  described the service                                                               
as crucial to all Alaskans, particularly those in rural regions.                                                                
                                                                                                                                
CHAIR DUNLEAVY announced he would hold SB 159 in committee.                                                                     

Document Name Date/Time Subjects
SB159.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
Sponsor Statement for SB159.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
Section Summary for SB159.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB159-DCCED-DOI-2-10-14.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
02 – Division of Insurance letter by Katie Campbell to Dina Yunker, 12 November 2013.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
03 – Division of Insurance letter by Katie Campbell to Airlift Northwest, 16 July 2013.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
04 – Division of Insurance letter by Katie Campbell to Dina Yunker, 19 August 2013.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
A - State tells medevac payment program to drop Alaska members, 26 November 2013.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
Airlift Northwest letter, 22 November 2013.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
B - Medevac insurance plan shut, Chilkat Valley News, 5 December 2013.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB 159 Support Letter_Airlift NW.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB 159_Support Letter_CommissionOnAging.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB159_Support Letter_SEAFA.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB159_Support Letter_SEAFA.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB159_Letter of Support_Guggenbickler.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB159_SupportLetter_Brantner.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB159_SupportLetter_Dangel.pdf SL&C 2/18/2014 1:30:00 PM
SB 159
SB 99A (28-LS0741A).pdf SL&C 2/18/2014 1:30:00 PM
SB 99
SB 99 Sponsor Statement.pdf SL&C 2/18/2014 1:30:00 PM
SB 99
SB 99 Sectional Analysis.pdf SL&C 2/18/2014 1:30:00 PM
SB 99
SB99-DCCED-AIDEA-02-14-14.pdf SL&C 2/18/2014 1:30:00 PM
SB 99
SB 99 Supporting Document- AS 44.88.650-690; AS 44.88.900.pdf SL&C 2/18/2014 1:30:00 PM
SB 99
Proposed Amendment to Senate Bill 99 FINAL.PDF SL&C 2/18/2014 1:30:00 PM
SB 99
SB 140 A.pdf SL&C 2/18/2014 1:30:00 PM
SB 140
SB 140 Sponsor Statement.pdf SL&C 2/18/2014 1:30:00 PM
SB 140
SB 140 Sectional Analysis (2).pdf SL&C 2/18/2014 1:30:00 PM
SB 140
SB 140 Sectional Analysis.pdf SL&C 2/18/2014 1:30:00 PM
SB 140
SB 140 ARPA_Polar map.pdf SL&C 2/18/2014 1:30:00 PM
SB 140
SB140-DCCED-AIDEA-02-14-14.pdf SL&C 2/18/2014 1:30:00 PM
SB 140
SB140_PotentialChanges.pdf SL&C 2/18/2014 1:30:00 PM
SB 140
SB140_Planning and Infrastructure Section of AAPC Preliminary Report.pdf SL&C 2/18/2014 1:30:00 PM
SB 140